Thank you, St. Clinton!
September 30th, 2008 by TheDaver
At the risk of becoming overly political (something I hope to never allow), let’s take a moment in this time of financial turmoil to remember the Bill Clinton years:
New York Times - September 30th, 1999
“In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.
The action, which will begin as a pilot program involving 24 banks in 15 markets — including the New York metropolitan region — will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans (i.e. - sub-prime loans - DA). Fannie Mae officials say they hope to make it a nationwide program by next spring.
Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.”
As we now know, this move didn’t turn out too well. In fact, the author of the article thought it might turn out poorly as well:
In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.
‘’From the perspective of many people, including me, this is another thrift industry growing up around us,'’ said Peter Wallison a resident fellow at the American Enterprise Institute. ‘’If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.'’
I’d say ole Pete Wallison nailed it.
Please don’t think I’m blaming St. Bill on this. I just want to call attention to the fact that this massive financial upheaval is far from being the result of our current president’s tenure. The fact is, Washington has screwed up, and has been doing so for years. Collectively, Washington has led us down this road. The fact is, Congressmen/women may be really smart, but they do really dumb things.
I hope they figure things out.
Hey Dave,
Good reminder. I love how current “people in control” seem to always blame those just before them. It seems to be true in all spheres of life. Seldom, in regard to the economy, does the current president have that much power.
Trey